5 Tell-Tale Signs That Your Financial Situation Is A Hot Mess
1. No monthly budget
How much money do you need to get through the entire year? How about the month? Typically, I get that I do not know or am unsure, or have no idea.
I feel like this should be self-explanatory, but it's not.
I'm not the kind of planner that scolds spending. I do not judge anybody. But seeing where their money goes is an eye-opener to most.
Going through making a budget and understanding your spending habits can change your life.
What is important to you becomes undeniable. So, we vote with our dollars. But maybe the spending doesn't align with what is important to you.
2. No goals
In 2010, Demi Lavato tweeted that she wanted to sing the National Anthem at the Super Bowl. Then, a decade later, she did it.
In 2013, Tom Holland said he wanted to play Spiderman in an interview; that worked out!
What's your goal? What do you want to do with your life? There are so many dreams, but few write them down. Practically none are accountable.
How can you spend or invest one dime of your money, for that matter, without knowing where you want to go in life and what you want to do with your resources?
Seriously
3. Ignoring retirement benefits at a young age.
I hear things like, "I'm young, no need to pay attention to my pension or retirement plan. I have more pressing issues to deal with right now".
I get it. It makes sense even on the surface, but if you don't know where you are headed, how do you know which way to go?
Understanding your retirement benefits and pension could help you make better decisions regarding your more immediately pressing issues.
Understanding the impact your saving could have down the road should, at the very least, open your eyes to the possibilities and help you prioritize its importance.
Maybe you are saving too much in your retirement plan for your goals. Oh, I got your attention now!
Probably not, but let's look at it and understand your situation so that we can deal with those pending issues more efficiently and sensibly.
4. You don't think about your taxes until April.
First of all, your accountant must love you. Waiting till the last minute to give your accountant your info is a surefire way for them to spend the least time on your return and ignore any future planning opportunities.
I could spend a whole post describing ways to improve your tax situation potentially. But unfortunately, 90% of them must be completed before your taxes are due.
If you are not considering ways to be more tax-efficient, reduce the amount of taxes you owe ahead of time throughout the year. You are dropping the ball.
Do you like giving the government money?
5. Making big financial decisions and then doing the research after the fact
Sure, refinance first and then see if it was a good move. Buy the stock, and then start researching it only when it goes down. What is the Crypto altcoin I bought? Was that Doge or Dog? The Whole Life Insurance Policy made a lot of sense when the advisor pitched it.
I spend my life working around these issues.
Suppose you had known the risks versus the rewards ahead of time. Would you still have made the same decision if you knew all of your options and solutions to satisfy your needs? The answer is almost undeniable: no.
It comes down to paying attention to detail and getting all the information to make an informed decision. I get it. It's not easy. The more you understand, the more proactive you are, the less stress you will have when something happens, and maybe, just maybe, you will have fewer issues due to your effort.